Wrong policy moves (US)...

Article;
Sensex, America and elections its three to tango.

Comment;

This time it (QE taper) looks real because at one occasion according to a FED official probably the whole QE program is misdirected and even harmful... Moreover asset price inflation and another-bubble fear could be the probable cause of sooner than expected QE tapering. But at another occasion Bernake said that interest rates will remain low ever after the end of the QE program until unemployment rate drops to 6.5 %. I think Bernake is going to surprise us this time before he leaves. We need to look carefully in to the words "misdirected and even harmful"… i think the FED is going to accept its policy mistake… because of its wasteful effort to reinforce higher inflation expectations to come out of liquidity-trap... It may be wrong to take the economy in the wrong direction when the economy should go for an internal devaluation which means a lower level of wages and income to achieve full-employment but the economy would generate demand by lowering prices but we have evidences of downward wage rigidity which may prove useful because prices will fall more than wages and that would mean a gain in terms of real-wages… However Keynes said the same thing for prices downward rigidity… But we have evidence of persistent deflation in economies like Japan… The FED too said it was expecting a deflation and is fighting deflation. So, downward price-rigidity is not supported by the evidences. Wrong policy moves…